BUY A PROPERTY IN NAIROBI BEFORE IT’S TOO LATE
June 5, 2020
The real estate industry in Kenya is one of the most prominent industries and one of the most preferred for investment purposes. Most investors tend to focus on real estate mostly amongst other means due to the potential of high returns on investment.
Nairobi currently is experiencing an over supply of properties and slow demand especially due to the Covid-19 Pandemic. The market was on the up and picking prior to the pandemic, as a result, demand for residential properties, commercial properties and land was high leading to a higher number of interests and enquiries leaving landlords with a diverse range of offers to choose from. However, with the Covoid-19 Pandemic still increasing in number, this has caused panic amongst clients and a fear of exposing themselves to the disease. As a result of this fear, the number of people willing to view properties has drastically reduced with clients preferring to stay indoors. This reduction in willingness to invest and commit funds to a residential, commercial and/or land property has caused a fall in demand putting landlords in a non-preferable situation. The reduction in demand levels does not help the situation of overcoming the oversupply of properties, in fact, it does the exact opposite as new developments are completed or are on the verge of being completed.
The actual truth, far from what is perceived by many is that, right now is the best time to purchase a property. Clients are reluctant to show concrete interest and commit due to the pandemic however the fact that there is an oversupply of properties reduces the probability of your property being purchased as a landlord of a specific property due to the high number of options for clients in the market. This is why in the current moment, landlords are more willing to reduce the prices for their properties more than they would if not for the covid-19 pandemic. Most landlords find themselves to be in a vulnerable position be it for both, in the aspect of rentals and sales. Due to the current trying times, tenants are requesting landlords to reduce their agreed asking rental price so as to lessen the financial impact of Covid-19. Since the ball is thrown towards the landlord, the final decision is obviously up to them however there have been situations where some landlords have agreed to reduce the rental price if it means not losing the tenant with the mindset being ‘I rather get some income than none at all’. A similar mindset applies to situations where landlords are looking to at selling their properties so as to cope with the financial difficulties of the Covid-19 Pandemic.
The current market forces are more favorable to clients than it is towards landlords. The current Covid-19 pandemic is making it tougher for landlords to sell off or rent out their residential properties in Kenya for the desired price and this gives more room for negotiation than would have been possible before the Covid-19 outbreak. This is well known by both parties, landlords and clients, as a result this is the perfect time for clients to try their luck and negotiate a price well below the market price of the given property. Given the Covid-19 outbreak, clients may reach an agreement for a property at a better deal than they would have expected due to the increased flexibility of many landlords to well consider the offer presented to them on the table.
Real estate consultants know best of the market conditions in place. The level of knowledge and insight that real estate consultants have in regard to the market is what landlords and clients tend to hold on to as the act as guidelines to the best course of action for both parties. The current market conditions as stated earlier are move favorable for clients than it is for landlords hence real estate consultants assist landlords by offering advice on the fact that its better to accept an offer even though it may be slightly lower than desired instead of losing the client completely resulting in a break down in negotiation and a long wait for another inquiry which may take ages.
Having pointed out why it’s the best time to purchase a property, the ball is now in your court! Buy a property in Nairobi before it’s too late!